Western Europe creates world's biggest market

Wednesday 23 October 1991 11.53 EDT
First published on Wednesday 23 October 1991 11.53 EDT

The foreign ministers of 19 west European countries have agreed on the creation of the world's largest common market, stretching from the Arctic to the Mediterranean and embracing nearly 400 million people.

Yesterday's breakthrough in the negotiations between the European Community and the European Free Trade Association was reached after 18 months of tortuous negotiations. It marks a further stage in a process which may lead to a 30-nation European Community by the end of the decade.

Within minutes of the agreement the Swiss government declared that becoming a full member of the Community would now be the 'goal' of Swiss policy. Austria and Sweden have already applied, Finland and Norway are expected to follow before long. Other existing applicants include Cyprus, Malta, and Turkey.

Yesterday the Dutch Prime Minister, Ruud Lubbers, President of the European Council, said negotiations to admit Austria and Sweden might now begin next year, a year earlier than originally expected. The Commission President, Jacques Delors, hailed the agreement as 'a trial run for future membership'.

Until almost the last moment in the final 18-hour negotiating marathon it was touch and go whether the agreement between the 12-nation EC and the seven countries of Efta to create a European Economic Area would succeed. Greece was threatening a veto unless it got many more licences for its lorries to use the environmentally sensitive Alpine routes, and deadlock threatened over access to Efta fishing grounds.

However, an outline agreement was finally hammered out in the early hours of yesterday. This regulates the vexed issue of the scale of trans-Alpine traffic through Austria and Switzerland, and swapped access to Icelandic and Norwegian fishing waters for opening up the EC market for fish.

In effect the Efta countries - Austria, Iceland, Finland, Liechtenstein, Norway, Sweden, and Switzerland - join the EC's single European market which will come into force at the end of next year. The Efta countries will have to accept some 10,000 pages of EC regulations covering trade, competition, and financial services. These will be supervised by a joint EC/Efta Council of Ministers and a joint European Court.

The agreement was greeted with low-key satisfaction by the European Community, which originally hoped the EEA would be an alternative to enlargement but is reconciled now to having to open its doors to many new members in both western and eastern Europe.

Work remains to be done on the legal details of the agreement before it is put for ratification to the European Parliament and the 19 national parliaments involved. In theory the European Parliament could veto it, as part of its campaign to secure greater powers, after the proposed treaty on political union comes into force, but MEPs believe they are slowly winning this battle anyway.

The agreement will give British fishermen increased access to Norway's rich cod-fishing waters. The much larger single European market is also seen by its advocates as offering an important boost to the competitiveness of European industry, helping to ensure improved growth and employment.

On the face of it the richer Efta countries should be the main beneficiaries but they will have to help the economic development of the poorer, mainly southern, EC member states. On the other hand the Efta states will not be directly able to help shape new EC laws until they become full members of the Community.